I'm considering the purchase of a large home and converting it into a 4 or 5plex for Senior Independent Living with some amenities.

I am risk averse and if I were to purchase, I would tear down to the studs and do a full rehab {this would include getting rid of asbestos shingles and insulation).1) I have done a ton of research and it appears as if getting rid of asbestos is very DIY able assuming you spend money on the safety equipment and use it properly. 

For 2024, I will have a significantly higher W-2 income (600k) due to unplanned stock option income (company I work for was purchased). 

You can move on from there and purchase a SFH if you don't like sharing a MF. 

When trying to do the deal analysis on my current property, it’s asking for the purchasing and closing costs.

Okay, so you specifically want arbitrage instead of to purchase something?  

And the IRS requires that all of the proceeds from the sale be used in the purchase of their new property. 

There is some purchase transactions and still private work (as I noted above). 

I would try to do 80% purchase loans on both.So 70k*80% = 56k loan amount 14k down payment + you will also have closing coststhen 120k*80 = 96k loan amount and 24k down payment + your closing costs So you will have about 32k - closing cost and loan costs for an additional investment

They cover the auctions and otc sales in a commendably detailed form, but when the sequence reaches the point of making a purchase, the instructions stop.